Company charges: Octaviar appeal allowed

In Re Octaviar Ltd; Re Octaviar Administration Pty Ltd 2009] QSC 37 the Queensland Supreme Court decided that variations to a company loan needed to be registered to be secured by the charge over the company's assets. That decision created significant concern for company lenders.

That decision has now been set aside by the Queensland Court of Appeal: Re Octaviar Ltd (No 7) [2009] QCA 282.

The charge was not an "all accounts" charge. It secured all money loaned under a "Transaction Document". The subsequent loan was recorded in a document agreed by the parties to be a "Transaction Document" but it was not registered with ASIC. The Court of Appeal decided it did not need to be as it was neither a variation of charge nor a new charge as defined in the Corporations Act.

UPDATE 20 October 2009: This decision is being appealed to the High Court.

UPDATE 1 September 2010: The High Court has dismissed the appeal from the Court of Appeal’s decision overturning the initial decision. Public Trustee of Queensland v Fortress Credit Corporation (Aus) 11 Pty Ltd [2010] HCA 29

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